June 25, 2009

Budget Impact on Republicans

Solving the state budget crisis has caused an impasse between our Republican governor and our Republican-led legislature. What impact is that having on the Republican party? Former Attorney General Grant Woods and political analyst Chuck Coughlin examine the issue.

TED SIMONS: Good evening, and welcome to "Horizon." I'm Ted Simons. A win for state lawmakers and the state's schools chief in the U.S. Supreme Court today. The court decided to send the English language learner case back to the lower courts with instructions that essentially remove the lower court's orders to pump more money into the system. The Supreme Court said the lower courts placed too much emphasis on how much money is spent to educate non-English learners. The court also said funding increases for education in general can be counted as additional funding for English learners. Some are calling it a fight for the soul of the Republican party . Conservatives have held sway over the party in recent years, taking a strong stand against new taxes. When Governor Jan Brewer, a Republican with strong conservative credentials, suggested a tax increase, she set off a fight in her own party that could have significant consequences. Here to talk about that and other issues facing Republicans are former state attorney general Grant Woods and political consultant Chuck Coughlin. Both by the way are Republicans. Still Republicans as of air time?

GRANT WOODS: Yeah.

TED SIMONS: All right. State of the G.O.P., Chuck? In general, the state of the Republican party in Arizona.

CHUCK COUGHLIN: We're having a little civil war at the legislature about whether we can govern as a party. We were given the office, I would say in the seventh inning of a nine-inning game with the deepest financial crisis in the history of the state. State government functionarily provides health care, education, and public safety and transportation. All four things that most voters feel are pretty rudimentary things, services that we provide. The government provides. We have to cut. There's no question the governor said we had to cut, we had to cut billions of dollars in spending out after $10 billion budget. But she at the end of the day said, I cannot stomach what we'll need to do to balance this budget on the backs of public education, higher education, and public health care. So she came to the conclusion given the enormity of the whole that we needed a temporary sales tax increase. She made that conclusion based upon her gut feeling of what -- from a feeling of where she's at, philosophically. She's never increased taxes in 27 years of public service, so that has to say something about who she is and where she’s at. But the party itself has had a mantra, Grover Norquist pretends he's the head pope of the party saying that we're against all tax increases. Well, that's -- it's a respectable position to have. It is clearly a part of our party, but it is not dogma.

TED SIMONS: Is that the Grover Norquist no tax increase pledge, and things like that, are they so ideological that forests are not being seen for the trees?

GRANT WOODS: I think so. I think Chuck is right, the governor, certainly with her record, has never been one that's a big spender or for raising taxes. But first and foremost you have to govern. And the legislature is partially to blame for the deficit that we have here, and not anticipating it along with the former governor. But the point is you've got to deal with it. Just like President Obama did, what did he cause? But he stepped into a big mess, and the democrats and nationally control everything. They're moving forward, and they've got a plan here, and we'll see fit works or doesn't work. But at least they have act and they've acted pretty much in unison. In Arizona, don't seem to be able to do that. At some point I'm confident the electorate will say , these guys don't have their act together, so we'll get somebody else.

CHUCK COUGHLIN: Either you cut and you succeed, I’m a political consultant, so you cut and you succeed in a Republican primary, but if you cut so far you're going to hand the office back to the democrats. It's been a fairly easy argument to make, and she understands that. I think she believes it's better for fiscal conservatives for Republicans to be in long-term control of the state legislature, and the governorship, so we can right the ship. I don't think anybody is saying is here to defend as all Republicans and state governments are defending. You can't do that. We can do better. At this point it's like trying to turn the Titanic around after it hit the iceberg.

TED SIMONS: She wants to do that. Do rank and file Republicans in Arizona want to do that?

CHUCK COUGHLIN: I believe majority of public opinion supports that. If you dedicate the tax to public education, health care, or public safety. Down at the legislature, this is what it's important to understand. Most everybody in the legislature, both on the Democratic side and on the Republican side, are elected in primaries. There's only about five or six races based upon a variety, starting with the civil rights act in 1964, why we elect from -- who gets elected. And so you don't really have middle of the road managers down there in most districts. They go back and they're elected in primaries, which are very narrow constituencies. When there's a $4 billion budget deficit trying to get those folks to act as practical managers of a $10 billion difficult, it's difficult.

TED SIMONS: Does that schematic that Chuck points out there, does that mean a smaller tent for the Republican party ? Have they taken it so far that a lot of folks who -- I know people who are -- one party or the other, and they've got problems with their party. The ones that are Republicans, they say, I don't know if that's my party anymore. I don't recognize it. That sounds pretty serious.

GRANT WOODS: I say that. I've lived my whole life here as a Republican. I've spent a good portion of my life in active involvement in the political world here. But the old days it was the Barry Goldwaters of the world that attracted me to the Republican party . I don't see is that, because one thing, senator Goldwater was a fiscal conservative. And so am I. But he would also have told you I think that the things that government should do, they should do well. So what we've got is a bunch of people who for whatever reason, they don't seem to really care if Arizona is 48th or 49th or 50th in education. They don't seem to really care if we have kids by the tens of thousands without health care. If we cut even more in those areas. That's not right. I think the Republican party can stand for fiscal conservatism, but it also has to stand for quality governance. You have to be able to say, I'm going to vote for him because I know he's not going to waste money. He's not going to tax us unless it's absolutely necessary. But he's going to get the job done in a quality way. That's what we're missing here.

TED SIMONS: It's the ones that don't care about those things, keep getting elected and wind up in leadership positions at the state house, again, what does that say about the party in Arizona?

GRANT WOODS: What it says is that the legislature for a long time in my view, really for 20, 25 years, the Republicans there as a group have not reflected Republicans or the electorate at large. If you look at Arizona as -- statewide offices, on propositions, it's actually pretty moderate group out there. We elect Republicans, we elect democrats. If you look at the issues where Arizona has come down, sometimes a little conservative, sometimes a little liberal. Pretty much down the road. But that legislature continues to be out of step. Will that ever change? I don't know. Because they've continued to rig the system so that if they win the primary, they won't have a competitive general -- we're taping here in Tempe. In Tempe, it's a good example of how it should work. If you run too far to the right or too far to the left you'll lose in the general to the person in the other party. This is one of the few areas where that's true.

TED SIMONS: The future of the Republican party in Arizona, the entire west is veering in a different direction than it looks like Arizona is veering. What does that say for the future?

CHUCK COUGHLIN: Well, we're in a fight. And whether or not we can hold those values and hold those conservatives in the party, and understand that we do have a rule in governing. And do we have the ability, what the governor said at the outset of this discussion, when she delayed -- delivered her five-point plan, was one of the things we need to do is control the rate of government growth. That's a good Republican conservative principle. State spending has gone out of control since about the '03 budget. It's just been skyrocketing. And so she and the legislature are working on proposals. There's grounds that we can make up. But again, you can't turn it around, I don't believe, in one session. She's been in office six months. The legislature -- the leadership of the legislature was elected what I call a war cabinet, to go to war with Napolitano. Governor Napolitano's budget since '07 that have been passed. It's not been Republican budgets. They were always the governor's budgets. Napolitano's budgets with a minority of Republican votes. And so what they got elected in leadership this time was a war cabinet to go to war with Napolitano. Well guess what, she left, and we still have a war cabinet fighting with our own governor, who is trying to govern I think on a statewide basis.

TED SIMONS: We've got to get out of here, but yes or no -- are you optimistic for the Republican party in Arizona if it stays as it is?

CHUCK COUGHLIN: No. I think every party has to change in order to accommodate. What we've seen on the national scale is an immense movement to the left. I'm very concerned. I'm hopeful that it works, but I'm very concerned a lot of things are there. I believe we need to recognize how to govern in that environment. We cannot become irrelevant. We have to manage toward the center, center right.

TED SIMONS: Optimistic in just in general for the party in Arizona?

GRANT WOODS: Definitely not, no . They're going to have to show that they can govern responsibly, that they can deal with quality of life issues. I think people care about education, for example, and this legislature and their record on education has been extremely poor. So they're going to have to bump it up in the areas that matter to people. If they don't, they're going to get tossed out.

TED SIMONS: Ok that’ll have to do it. Thank you both for joining us on "Horizon."

Copper Mining Land Exchange

The Resolution Copper Mining company is asking Congress to approve a federal land swap that will allow the company to begin mining a huge body of copper ore near Superior, Arizona. The project could provide a huge economic boost to a community, but it may also have some negative impacts. Join us as we travel to Superior to hear from both critics and supporters of the project. Our studio guest is David Salisbury, President and CEO of RCM.

TED SIMONS: Arizona senators Jon Kyl and Jon McCain are sponsoring a bill in the U.S. senate that would initiate a land exchange between the federal government and a foreign-owned copper company. A similar bill has been introduced in the house that one's backed by Arizona Congresswoman Ann Kirkpatrick, a democrat, and Congressman Jeff Flake, a republician . Part of the goal, as David Majure reports, is to create jobs in an economically depressed -- or depressed, I should say -- Arizona mining town.

DAVID MAJURE: Copper mining made this town. It raised it up and brought it crashing down.

ROY CHAVEZ: Yeah, up and down. Up and down. In the beginning stages, it was boom, boom, boom .

DAVID MAJURE: Roy Chavez grew up in Superior, Arizona, ran a business here, and served as the town's mayor. He watched this boomtown go bust.

ROY CHAVEZ: A lot of these buildings were originally owned by old families.

DAVID MAJURE: It never fully recovered after the magma copper mine closed for good in 1996, and it shows.

ROY CHAVEZ: It's 100 years of the industry in the area. Good and bad. Boom and bust. You live by the sword you die by the sword.

DAVID MAJURE: But the prospect of new fortune is on the Horizon. The resolution copper company has taken over the abandoned mine. It believes it's sitting on a copper deposit about the size of this local landmark, Picket Post Mountain.

TOM GOODELL: This is world class ORE body. It's very unusual to find this much copper in one spot.

DAVID MAJURE: The company says it's enough to produce 20% of our nation's copper demand for the next 50 years. But getting to it won't be easy. It's about a mile underground.

TOM GOODELL: The A-frame you see in the background is for the new shaft. It's designed to go 7,000 feet deep. It will be 28 feet finished diameter. A shaft of this size and this depth has never been done in the United States. So we're really talking the Super Bowl of mining projects.

DAVID MAJURE: To get in the game, the company says it needs about 2400 acres of Federal Forest Service land just east of this location. More than 700 acres of it was withdrawn from mining by presidential order in 1955, including the oak flat campground. Sandy Barr of the Sierra Club would like to keep it that way.

SANDY BARR: Well we think oak flat is special.

DAVID MAJURE: It's a popular place for rock climbing. And Native Americans say they have spiritual ties to the land.

SANDY BARR: There are a lot of old oak trees here that provides shade and a nice place for people to camp and picnic. It's just to the east of Superior, and it's been a campground for a long time, and protected from mining activities for a long time.

DAVID SALISBURY: If we look over this way, this is where the oak flat campground is over here. And then if we pan back over to this direction, the actual ORE body is in this direction. It covers about a square mile.

DAVID MAJURE: Resolution Copper is asking Congress to approve a land exchange. It wants ownership of oak flat and the right to mine there. In return, it will give the federal government 5500 acres of important lands for conservation. But critics say it's not clear if the public's getting a good deal, or how the mining operation will impact the environment.

SANDY BARR: How you make a good decision without good information?

DAVID MAJURE: Barr says by going to Congress, the company is circumventing the National Environmental Protection Act, or N.E.P.A . It's a process triggered by major federal actions that impact the environment.

SANDY BARR: It says we are going to look at this issue, we're going to look at alternatives, we're going to look at the impacts. We're going to be up front with the public about what they are. We're going to provide the public an opportunity to comment and to ask for changes.

DAVID SALISBURY: We've made a commitment in the legislation that we would do a full NEPA process.

DAVID MAJURE: The land exchange legislation does include an environmental analysis of the mining operation. But it comes after the bill is passed.

SANDY BARR: The National Environmental Policy exact is a look before you leap law. With this process, you take this giant leap without any proper look.

DAVID MAJURE: Resolution copper says its land exchange bill is a business decision, based on the need to sink a shaft and explore beneath oak flat before environmental impacts or mine feasibility can be determined.

DAVID SALISBURY: We as a company, we've got to commit nearly a billion dollars to do that correctly. For us to commit to that kind of money, without some clear path forward, is a significant business risk for us. And so we've got to have some confidence that at the end of this process that there is a light at the end of the tunnel, a way to build the mine and develop the project that's going to reap the economic benefit both for us as a company as well as for the federal government and the local communities as well.

DAVID MAJURE: The mine is sure to have a huge economic impact on the town of superior. It's expected to operate for more than 50 years with 1400 employees at the peak of production. Signs of support are all over the place. And residents like Mike McKee are optimistic.

MIKE MCKEE: I want the mine to come back and I know it's going to give us that opportunity, you know, to let the town come back alive.

DAVID MAJURE: Mike and Roy have been friends for quite some time. But they don't always see eye to eye, especially when it comes to the mine.

MIKE MCKEE: We don't let our differences ruin our friendships.

DAVID MAJURE: Roy is part after small group concerned about how the mine will impact land and water.

ROY CHAVEZ: During this process, of the land exchange, those questions will be answered after the fact. However, we believe after the fact is way too late.

DAVID MAJURE: In the meantime, Resolution Copper is trying to gain the trust of a community that's been burned by mining time and time again. It's investing millions of dollars to clean up the mess magma left behind and providing financial assistance to Superior.

MICHAEL HING: The town sign add major agreement with the company to provide social impact dollars for the community, as much as $400,000 a year for the next 20 years.

DAVID MAJURE: The mayor says it's up to the town to keep a close eye on mining operations.

MICHAEL HING: We're going to hold you accountable. You better do it right. I'm the first to say, you better do it right.

DAVID MAJURE: Done right, it may be just what this town needs.

MIKE MCKEE: Obama ain't going to help us out with a stimulus package. This is the stimulus package.

DAVID MAJURE: It's one more boom in this town has some work to do to keep from going bust.

TED SIMONS: Joining me now is David Salisbury, president and C.E.O. of resolution copper mining. Thank you so much for joining us.

DAVID SALISBURY: Pleasure to be with you.

TED SIMONS: From the package, what we just saw, I heard a lot of concern regarding what seems to be, what critics are calling an end around the process of environmental impact studies, the national environmental policy act, these sorts of things. A comment if you would, does this go around that particular requirement?

DAVID SALISBURY: We've never intended to try to bypass that requirement. We've committed to a full NEPA review of the process. Encouragingly, representative Kirkpatrick's legislation includes a NEPA review of the process before the exchange is completed, and we fully support that legislation.

TED SIMONS: So in other words, those that say the NEPA process, once it's enacted, once the bill and exchange is enacted, the process is after the horse is left the barn, you're saying the horse may still be in the barn?

DAVID SALISBURY: Yes. We support that preexchange of NEPA.

TED SIMONS: Why not go through the NEPA process now?

DAVID SALISBURY: It's an interesting position, because we need to spend significant money to do a proper evaluation of the ORE body, and then to do a NEPA that is directly -- correctly designed. To do that, the land we need to get to is with -- has been withdrawn from activity. So we need access to that land to do the full package, then we can carry forward that full NEPA process, which we fully intend to do.

TED SIMONS: Can you mine the area without that oak flat parcel?

DAVID SALISBURY: We can mine a portion of it, but the ore body itself comes adjacent to the oak flat campground. We don't want to mine there without the proper authority and quite frankly the ownership, so we don't create any disturbances that may reflect from that mining into the campground itself.

TED SIMONS: That is one of the concerns as well, roads are going to be widened, there's going to be dust, construction vehicles will be up there where have you campers and recreational users. Is that concern valid?

DAVID SALISBURY: It is. It's something we want to take care of. We want to make sure -- our company is committed very strongly to provide an environmentally sound mining process and public safety. And we do that globally. We have a strong reputation for having completed that. We want to make sure we do this in the same environmentally sound manner.

TED SIMONS: The land swap was withdrawn. I should say the mining area was withdrawn from mining concerns, this particular area, oak flat. First, back in '55, the Nixon administration redid the whole thing and upheld it in '72. The past has said , we don't want this area mined. Why now?

DAVID SALISBURY: It's our understanding the withdrawal was undertaken to protect an investment the forest Service had made in the campground itself and roads, and it was part of a much larger package. The Nixon administration change opened the door for the land to be exchanged in the future. Right now there's a very large copper ORE body well below that ground, and we think that's important for the country, we think it's important for our strategic security for metals. In an environment where we have wood generation, hybrid cars, all of these take increased amounts of copper. So I think the copper demand in our country is going to increase in the future. Today we depend on some foreign sources for our copper demand. We would like to make sure that we have a domestic source that benefits Arizona, and the local communities where that copper ore body lies.

TED SIMONS: What is block cave mining and how dangerous is that to the surrounding areas? Sounds like a recipe for sinkholes.

DAVID SALISBURY: Well, block cave mining is a particular mining method that fits this particular ORE body. We know that some concerns have been raised about the old style mining that was used in the old magma mine, which basically mined narrow veins of copper. Our ore body is a very large block, and cut and fill mining will not safely allow us to mine that ore body. So block cave mining is a way to take out large blocks of ore in a way that is safe for our employees, that maximizes the return of the mineral there to the revenues of the U.S. and there will be some impact on the surface but we believe that will be minimal.

TED SIMONS: The land conveyed back to the public and the land exchange, where is this? How many parcels are we talking about here? There are about 5,000,500 acres. There's two large parcels, one is just over 3,000 acres on the lower portion of the San Pedro river. There's another 800-acre portion in the Appleton research ranch. Interestingly enough these parcels were developed and the selection of these parcels was very much a part of a public process. We went to the U.S. forest Service and the bureau of land management and said, where are your top priorities of private lands would you like returned into the forest areas in the public holdings? We also talked to folks like the nature conservancy and Arizona Audubon who also conveyed their interest in these parcels, and it was from their input of these being what they believe the important parcels that we assembled this land package.

TED SIMONS: I also want to bring up the consultation issue with American Indian tribes. How much consultation have you had? The criticism is that these tribes see this area as sacred, and there hasn't been a lot of talk with them about what you're planning to do.

DAVID SALISBURY: I'd have to say one of the most disappointing elements of our project to date is the fact we've not been able to engage in an open dialogue with the Native American community. As a company. And personally in projects I've worked before, working with Native American communities, we've had great opportunity to talk about their concerns and the opportunities that benefit that may flow from a project like ours. We recognize the tribe sovereignty and their interest in maintaining government-to-government relations. Therefore it puts us in a position where we hope there's someone that will bring us together so we can have that dialogue. We have made a numerous invitations and we've requested those dialogues, but to this date it hasn't happened. And again that's very disappointing to us because we want to maintain that ongoing process.

TED SIMONS: Very quickly, back to the whole NEPA process scenario, if you went ahead and went with that process and got all this stuff out in the open and out in the air and everyone got talking, and realizing what was going on, would the American Indian situation improve along with other avenues? In other words, why wait again? Why not go now?

DAVID SALISBURY: They would be a part of that process. We definitely want to make sure that process moves forward -- there is that open transparent dialogue. Again we support what representative Kirkpatrick has put in as a NEPA in the front end to make sure that dialogue takes place in looking at these lands that are going to be exchanged.